Vietnam: Draft decree guiding the new Consumer Law

In brief

Following the promulgation of the Law on Protection of Consumers' Rights (amended) ("New LPCR"), the Ministry of Industry and Trade (MOIT) has released for public consultation the draft decree detailing and guiding several articles of the New LPCR ("Draft Decree").

The Draft Decree is due to come into effect on 1 July 2024, which is also the effective date of the New LPCR. The draft includes eight chapters and 30 articles, enclosed with 14 regulatory forms that will be used in different procedures under the New LPCR.

Below are some key takeaways from the Draft Decree:


Contents

Key takeaways

1.           Obligations of intermediary digital platform operators

Lawmakers at the MOIT are proposing new obligations for operators of intermediary digital platforms under the Draft Decree, including the following:

  1. Publicly announcing criteria for determining priority for displaying products, goods and services if such digital platforms have a search function (In case the displayed content is paid or sponsored content, it must be disclosed in the search results for products, goods and services.)
  2. Preparing a comprehensive annual report covering multiple issues, including the amendment of the platforms' policy, provision of sellers' data/information to buyers upon request, the removal of feedback in case they contradict the law and morality, the verification of business users' identities, etc. (The report will need to be submitted to the MOIT.)

2.           Obligations of large digital platform operators and qualification criteria

The New LPCR imposes new obligations upon operators of large digital platforms, but this concept of "large digital platforms" is subject to the government's interpretation. Thus, under  the Draft Decree, the drafting agency now proposes that a digital platform will be considered a "large digital platform" if it falls under any of the following circumstances:

  1. Meet certain thresholds of the total number of visits and users in a month
  2. Meet certain thresholds as to the total value of online transactions in the Vietnamese market in a year
  3. Being established and operated by those in the top five market-leading businesses in the field of e-commerce
  4. Being established and operated by businesses with a dominant market position according to the provisions of competition law
  5. Being a large or very large digital platform according to electronic transactions laws

Vietnam recently issued a new Law on E-Transactions, in which administrators of large and very large digital platforms serving e-transactions will be subject to several obligations. However, the law does not prescribe the criteria for a platform to consider "large" or "very large." This issue should be clarified under the draft decree guiding the new e-transaction law, but it has not been released for public comment.

The operator of a large digital platform will further have to carry out the following:

  1. Establish a compliance department specializing in consumer protection and e-commerce regulations
  2. Ensure that the employees working for the compliance department are trained on the laws of consumer protection, e-commerce and relevant laws
  3. Prepare and submit biannual compliance reports to the MOIT  ̶  The report must include various mandatory information, notably information regarding the advertising archive establishment, the use of algorithms to target vulnerable consumers, the handling of fake accounts, and the use of artificial intelligence and automated solutions.

3.           Publication of list of cyber offenders of consumer protection laws

Ministries, ministerial-level agencies and provincial-level People's Committees will be responsible for providing and publicizing information on the list of organizations and individuals doing business in cyberspace that violate consumer protection laws.

Also, offenders must: (i) send reports to competent agencies; and (ii) provide information to local press/news agencies to keep the public informed of the respective violation.

Additionally, offenders will have to announce the sanctioning decision of the competent authority at their headquarters and post it on their website within the prescribed time.

4.           General requirements for standard contracts and general trading conditions 

The Draft Decree proposes some formal requirements (such as language, letter size, color, page layout and clarity in content) concerning standard contracts and general trading conditions. However, such requirements are not entirely new, as most of the wording seems to be replicated from the wording of Decree No. 99/2011/ND-CP guiding the current Law on Protection of Consumer's Rights.

5.           Responsibilities related to defective products

The Draft Decree provides detailed procedures regarding: (i) the public announcement of defective products/goods recall; (ii) reporting competent authority as to the recall; (iii) identification of defective products/goods; (iv) the competent authorities' involvement in the recall of defective products/goods.

6.           Definition of "influencers"

The Draft Decree elaborates on the definition of "influencers " under the New LPCR by defining "influencers" as famous people; experts, people with high expertise and influence in a specific field; reputable persons according to the provisions of law; people who are noticed by society and have influence in the mass media; and other subjects as prescribed by laws. As there are no quantitative criteria for identifying an "influencer," whether a person is considered an influencer under the Draft Decree will likely be up to local authorities' interpretation.

As a matter of local legislative procedure, companies can submit comments and recommendations on the Draft Decree until 25 October 2023.

Please let us know if you have any inquiries or need any assistance in this matter.

Contact Information
Tuan Linh Nguyen
Government Affairs Manager at BakerMcKenzie
Hanoi
tuanlinh.nguyen@bmvn.com.vn
Tran Thanh Do
IPTech Executive
Hanoi
alex.do@bmvn.com.vn

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